Biased Policy Professionals

Although the decisions of policy professionals are often more consequential than those of individuals in their private capacity, there is a dearth of studies on the biases of policy professionals: those who prepare and implement policy on behalf of elected politicians. Experiments conducted on a novel subject pool of development policy professionals (public servants of the World Bank and the Department for International Development in the UK) show that policy professionals are indeed subject to decision making traps, including the effects of framing outcomes as losses or gains, and most strikingly, confirmation bias driven by ideological predisposition, despite having an explicit mission to promote evidence-informed and impartial decision making. These findings should worry policy professionals and their principals in governments and large organizations, as well as citizens themselves. A further experiment, in which policy professionals engage in discussion, shows that deliberation may be able to mitigate the effects of some of these biases

Care provision: An experimental investigation

In many principal-agent settings, the effort provided by the agent benefits a third party. In these settings, the quality of the work is determined, at least in part, by pro-social motivations. We present lab experiments that utilize a new three-player trust game to examine one such setting, care provision. Players include a principal, an agent, and a needy recipient. The principal can transfer resources to an agent, who then can transfer resources to the needy recipient; the latter transfers are tripled. As in the two-player version, we find high, but variable, levels of trust and reciprocity (agent transfers to target) in the baseline game. Two treatments allow us to gauge the impact of potential policy interventions to enhance care of the target recipient. The first provides a budget subsidy to the principle, and the second alters the effectiveness (multiplier) of the agent’s transfers. Results show that the behavior of the agent does not vary by treatment, and is determined primarily by the amount received from the principal. Principals, on the other hand, do respond to the policy changes. While budget subsidies increase the expenditure of the principal only slightly, policies impacting the agent’s efficiency increase the amount entrusted to them by principals and significantly impact the well-being of the recipient. Results suggest that policies that increase the effectiveness of care workers (the agents) may significantly impact the quality of work provided. Examples of such policies include increased worker training and reductions in red tape

The use of video vignettes to measure health worker knowledge. Evidence from Burkina Faso

The quality of care is a crucial determinant of good health outcomes, but is difficult to measure. Survey vignettes are a standard approach to measuring medical knowledge among health care providers. Given that written vignettes or knowledge tests may be too removed from clinical practice, particularly where “learning by doing” may be an important form of training, we developed a new type of provider vignette. It uses videos presenting a patient visiting the clinic with maternal/early childhood symptoms. We tested these video vignettes with current and future (students) health professionals in Burkina Faso. Participants indicated that the cases used were interesting, understandable and common. Their performance was consistent with expectations. Participants with greater training (medical doctors vs. nurses and midwives) and experience (health professionals vs. students) performed better. The video vignettes can easily be embedded in computers, tablets and smart phones; they are a convenient tool to measure provider knowledge; and they are cost-effective instruction and testing tools

Cracking down on bribery

Do crackdowns on bribery impact corrupt behavior in the long run? In this paper we observe the long-run impact of a short-term punishment institution (i.e., a crackdown) on bribery behavior in a lab setting. We conduct lab experiments in two countries with cultures that differ in corruption norms, and which experience very different levels of bribery: the US and Pakistan. Bribery is implemented in the laboratory as a repeated three-player sequential game, consisting of a firm, a government official and a citizen. The design contains three phases: pre-crackdown, crackdown, and post-crackdown. Results show that post-crackdown behavior is not significantly different from pre-crackdown behavior in either country. We conclude that short-term crackdowns may impact behavior in the short run, depending on the strength of the existing corruption norms in the country. More importantly, in our setting crackdowns are completely ineffective in the long run, as corrupt behavior rebounds to pre-crackdown levels

Al Qaeda at the bar: coordinating ideologues and mercenaries in terrorist organizations

Most terrorist groups have limited lifespans. A number of scholars and casual observers have noted that terrorist organizations often are comprised of two types of participants: ideologues or "true believers" dedicated to the group's cause, and mercenaries, who are adept at raising money through illegal means. The latter are interested primarily in their personal gains and have relatively little ideological commitment. Terrorist groups need both participants in order to function effectively. The purpose of the study is to understand the impact of communication on the compositions of terrorist groups. Three experimental treatments consider a coordination problem, and focus on the behavior of the mercenaries. Participants choose whether or not to participate in a terrorist attack. Payoffs are U-shaped in the number of participants, and increase with the number of successful attacks. The treatments allow communication between a leader and frontline fighters ("leader" treatment) or among the frontline fighters themselves ("communication" treatment). In the first treatment, a group leader can post messages to the members, which has a 19 % coordination success rate. For the communication treatment, all participants can post messages anonymously to each other, which yields a 27 % coordination success rate. By contrast, the baseline ("no communication" treatment) shows a success rate of 11 %. We conclude from our experimental evidence that disrupting communications among the frontline fighters is more effective in terminating terrorist organizations

The Culture-Corruption Hypothesis Revisited:Organizational Culture, Corruption and Worker Preferences

The empirical literature on corruption has grown exponentially, mainly due to improvements in measurement. The research has focused on survey-based measures of corruption perceptions; expert informed measures; government official behaviour; and even behaviour of the public. Improvements in the measurement of such clandestine activity have led to deeper understanding of the effects of corruption. The “Culture of Corruption” hypothesis states that a prescriptive social norm exists which promotes “abstinence from corruption” in some contexts but not in others. In this paper I explore this relationship. I examine the culture-corruption hypothesis by first reviewing papers that unpack the relationship between culture and corruption, by examining the empirical literature that establishes the linkage between corruption perceptions and corrupt behaviour and asking whether this behaviour is particular to public officials or is prevalent in the wider population. I ask whether perceptions of corruption impact selection, whether corruption can increase or decrease over time, and what is the role of pecuniary incentives in attracting workers with the “right” preferences. I conclude with some reflections on areas for future research and some open questions

A Behavioural Economics Perspective on Compliance

Protecting employee whistle-blowers is important, as this is a significant source of uncovering wrongdoing, both for public, and private organizations. How whistle-blowers make decisions is complex, and potential whistle-blowers may not have complete information on the strategies that are chosen by their organizations in response. Hence, whistle-blowers must undertake decisions in uncertain conditions. It is in dealing with this uncertainty where behavioural economics is informative. This paper reviews the behavioural economics perspective on compliance with rules (broadly) and with whistle-blowing and antitrust compliance (more specifically) culminating in a series of recommendations for organizations seeking to improve employee compliance and detection of potential infringements of the law. I focus on four main points: First, is the importance of voluntary compliance (as opposed to enforced compliance). This is important because it carries a broader set of actions than enforced compliance (which typically pertains to behaviour that is observable). Highlighting non-pecuniary rewards, such as benefits to society, reputational gains, and career impacts, are critical. Second, is the importance of perceptions and beliefs. Focusing on whistle-blower protections and correcting beliefs regarding the risks (and potential losses) associated with reporting are critical. Third, beliefs are typically the result of social norms: shared expectations of behaviour. Collecting information on norms and correcting misperceptions is an important way to increase compliance. Fourth, selecting the right workers: Selecting workers with strong preferences for compliance (those that are more pro-socially motivated) allows for increases in compliance without the need of strong monetary incentives

The Decisive Mind

Have you ever wondered why you make bad decisions? Or why it’s so hard to make a decision in the first place? Through pioneering research into behavioural science, decisions expert Dr Sheheryar Banuri has designed an entirely novel decision-making framework which can be adopted into everyday life to help us better our decision-making skills by understanding and streamlining the process. The result? Simple, effective and efficient techniques to combat indecision. The Decisive Mind will draw on examples from evolutionary psychology, examine our ability (or inability) to prioritise and highlight the scenarios that force decision-making errors, and help us understand our own minds. By unpicking a lifetime’s worth of misconceptions about our own decision-making patterns and habits, this book will guide you on your first steps towards optimising your own brain space

Good decisions for strange situations

Good decisions are hard to make - agreed? Whether it's deciding what kind of take-away to order, what brand of shampoo to buy, or what to do in a crisis, we've all been in situations where we panic or overthink. And now, more than ever, we are in unfamiliar territory. Our routines and norms have been completely disrupted, replaced by stress and anxiety and making a good decision is harder than ever. But this book is here to help. Behavioural Economist Dr Sheheryar Banuri will be your guide. By asking: What can we learn from past behaviour in similar crises? How does the psychology of decision-making change under stress? And how can we avoid making the wrong decisions? Good Decisions for Strange Situations is that fool-proof guide to help you give yourself the best possible chance of choosing wisely

Borrowing to keep up (with the Joneses): Inequality, debt, and conspicuous consumption

The quest for status is a powerful motivator, but does it affect inequality? This paper presents a novel lab experiment that was designed and conducted to identify the relationship between conspicuous consumption, access to credit, and inequality. We report four main findings: First, consumption increases when it is “conspicuous” (i.e., is both observable and signaling ability). Second, costly borrowing increases when consumption is conspicuous. Third, the increase in costly borrowing is driven by those at lower income levels. Finally, in the presence of conspicuous consumption, access to credit exacerbates inequality